Seagate's happily paying a 50% premium over the preceding three month stock price average to get its hands on Dot Hill.

Little wonder the target company's board has unanimously agreed to the transaction.

It's not hard to see why – the company's been struggling to contain its administrative expenses and has posted years of meagre profits. Becoming part of the far larger Seagate will likely mean Dot Hill's back office is subsumed into its new owner's, where hopefully economies of scale will mean admin costs dip. Dot Hill does around $240m of revenue a year, a cash trickle that shouldn't trouble the systems managing Seagate's ~$14 billion annual take.

Owning Dot Hill gives Seagate the chance to sell its chassis to OEMs and to make sure that they're packed full of its disks and flash when they leave the factory. It also gives the storage giant the chance to head off storage companies as they adapt their wares for cloudy uses. The EMC Federation is already heading in that direction with the forthcoming EVO:RACK and VxRack products that will take EMC storage into cloudier use cases. HP and Dell are also keen to show they can scale to any size, while also dropping costs to suit hyperscale operators thin margins. Taiwan's and China's big OEMs are also getting ready to sell direct to bit barn operators.

Seagate having a waft at that market as it forms therefore makes sense. Whether Dot Hill is quite the vehicle to get it there, given its modest success to date, remains to be seen. ®